IBM/Baan Launch $20m European Implementation Factory

By Antony Akilade After its June 1999 opening of a Baan Co NV ‘implementation factory’ in Atlanta, US, IBM Corp yesterday unveiled a comparable facility in Copenhagen, Denmark targeted at the mid-cap European discrete manufacturing industries. Stressing that the venture was a non-exclusive arrangement, Baan CEO, Mary Coleman told Computerwire that IBM had now built […]

By Antony Akilade

After its June 1999 opening of a Baan Co NV ‘implementation factory’ in Atlanta, US, IBM Corp yesterday unveiled a comparable facility in Copenhagen, Denmark targeted at the mid-cap European discrete manufacturing industries. Stressing that the venture was a non-exclusive arrangement, Baan CEO, Mary Coleman told Computerwire that IBM had now built considerable intellectual capital around the Baan suite of products, adding that the investment of $20m to build up both the Atlanta and Copenhagen facilities was unique. Mike Plymack, IBM Global Services Baan practice executive was reluctant to confirm that dollar figure for the investment, but did say that the partnering had involved more than 50 man-years of effort. Plymack also said that it would be quite some time before other ERP vendors and IBM would share a similar relationship.

According to Plymack, the Atlanta facility currently has five or six pilots going throug’, while the Copenhagen facility expects to see a similar number by year-end. When the Copenhagen facility is fully operational it is expected that between 12 and 15 projects will be running through each facility concurrently.

Coleman predicted that smaller European niche ERP vendors such as SSA, Damgaard and QAD serving the mid-cap manufacturing industries were likely be squeezed in the coming year as Baan re-focused itself on this market.

Plymack stressed that the factory approach illustrated that the strength of IBM Global Services is as a system integration house rather than in consulting. He said that IBM is now able to cut both the cost and time of ERP implementations by 50%. With those savings customers would be able to afford a greater degree of customization, he explained. Plymack expects customers to eventually pay 70% of what they would have previously. Per Norling, CEO Baan EMEA, said that a 400 seat set up would be up and running in 6 months using the ‘factory’ approach.

Currently it can cost around 20% of the overall implementation bill to maintain an ERP system each year it is live, according to Plymack. It is claimed that the implementation factory would enable customers to cut this cost by around 5%-6%. In areas such as skills transfer processes, data conversion and business modeling, IBM reckons its factory production process approach results in fivefold productivity improvements.

A group of 20 of IBM’s 400 Baan ERP consultants have been involved in building up ‘factory’ assets. At the heart of the approach is Baan’s DEM (dynamic enterprise modeling) tool that is used to simplify a number of traditionally complex operations such as data conversion. This frees consultants from laborious data preparation tasks. ‘Consultants like to be able to get in, do the job, and move quickly on to the next engagement. That’s why they became consultants,’ said Plymack. For Baan, any shift in focus from a heavy dependence on consulting staff should help improve business. Indeed Baan is banking on it having a significant effect on its bottom-line.